Q&A: Chairman’s insight

Bob Loeffler, NACDS chairman and chief administrative officer of H-E-B, reflects on his time as chairman and shares his insights on the issues facing retail pharmacy today and tomorrow.

DSN: Last year, you emphasized the “new normal,” which seemed to refer to the need to proactively position the benefits of retail pharmacy. How has the “new normal” played out?

Loeffler: My point last April was that [the National Association of Chain Drug Stores] had become a much more focused and effective trade association, and that its new and higher level of performance defined the “new normal.” My point was that we needed to be careful to not just pat ourselves on the back because we got better at what we do. Rather, I wanted to encourage NACDS to use our “new normal” as the new baseline for building on our progress. This new normal has played out in several ways. We have taken the new NACDS Total Store Expo from a concept to a planned event, which we are confident will usher in the next generation of trade shows for the benefit of suppliers and retailers alike. On the proactive issue of medication therapy management, we have seen the Center for Medicare and Medicaid Services boost its promotion of MTM in Medicare, while private plans are learning from their experience in Medicare Part D and expanding MTM to their entire book of business. On reimbursement, we have seen NACDS and our allies take an important and successful stand against Medicaid cuts in California, and we have maintained our strong backbone when it comes to the government’s continued work on the new Medicaid AMP rule. We have done all of this while taking an important stand on pharmacy benefit manager issues. As the saying goes, you’re either moving forward or you’re moving backward, and there is no standing still. Over the past year, NACDS has succeeded in further raising the bar of the “new normal” as it refers to the focus and effectiveness of the organization.

DSN: When you think about your time as NACDS chairman, what are you most proud of?

Loeffler: That’s easy. I’m most proud of the people in NACDS member companies. NACDS has the privilege of advocating for, and telling the story of, the good work that community pharmacies do every day across the nation. From medication counseling to immunizations to screenings to health education, I can’t think of an industry that has more to talk about than community pharmacy, and the thanks goes to those on the front lines making it happen. I also want to emphasize that this positive impact is magnified when you take into consideration the products of NACDS associate members and the front-end operations of NACDS chain members. A close look at NACDS reveals an organization that represents health, wellness, patient health and consumer satisfaction — that is something very powerful to stand for. I also want to commend the people of community pharmacy, not only for proving the value of what they do every day in their stores, but also for showing it in the halls of Congress. Take NACDS RxImpact Day on Capitol Hill, for example. Pharmacy advocates held 350 Congressional meetings this year during our event, and that is up from 275 meetings the year before. We had 41 states represented — an increase from 37 states in 2011. It is a credit to the people of this industry that going to Washington, D.C., and to state capitals no longer is seen as an interruption of one’s business but rather as a necessary part of fighting for pharmacy patient care. As I always say, our opponents will be all too happy to take the meetings that we otherwise would have had, and they will be telling legislators exactly the opposite of what we are telling them.

DSN: If you had another year to serve as chairman, what else would you add to your to-do list?

Loeffler: The great thing about NACDS is that it really is not about any one chairman’s agenda. The NACDS board has set a very solid course of focusing on three priorities: government advocacy, communicating pharmacy’s value, and fostering business community and solutions through our conferences and other member programs. Each year, we need to maintain an aggressive offense and a tough defense to keep making progress on those three priorities. So, if I were serving for one more year, I would remain focused on advancing those priorities given the current operating environment, just like Larry Merlo of CVS Caremark did during his chairmanship just prior to mine, and just like Greg Wasson of Walgreens will do over the next 12 months.

DSN: What advice do you have for the incoming chairman?

Loeffler: First of all, Greg Wasson is going to be an excellent chairman for NACDS. It is a responsibility of the vice chairman to serve as chairman of the NACDS Political Action Committee. When I served in that role, I was pleased that donors helped equip NACDS-PAC with excellent resources to support the campaigns of real friends of pharmacy running for the U.S. Congress. We set a record for contributions the year I was chairman of the NACDS-PAC. Well, Greg blew that record out of the water and set a new standard for NACDS-PAC. Greg is a smart and hard-charging leader in whom we all have a lot of faith, and NACDS is in great hands. As for advice, the good news is that Greg already knows my thoughts. NACDS is very organized and is very much a member-driven trade association. We have talked extensively throughout the year. In short, Greg knows that NACDS is a good horse that can be ridden hard. He also knows we are all right there behind him on every issue to be faced.

DSN: What do you see as the three biggest challenges facing the industry, and what are three things you are most optimistic about?

Loeffler: I’ll give you some top-of-mind challenges:

People in general — and the federal and state governments in particular — don’t yet fully understand the pharmacy industry and what it has to offer. That is a big challenge. NACDS has ramped up this education effort big time, promoting pharmacies as the face of neighborhood health care, and we have gotten the education ball rolling. But there is a lot of turnover in Congress and the state legislatures, and the education hurdle we have ahead of us continues to be a tall one. Because they don’t understand pharmacy, pharmacy programs are not fully understood as programs that keep people healthy and out of operating and emergency rooms — at a huge savings to payers. Instead, pharmacy is seen as an expensive piece of the healthcare system that needs to be cost optimized.

That leads to the second challenge: Compensation from government and even private payers is declining. Gross margin pressures will continue for the foreseeable future unless we are able to effectively get our message across.

Both of the above further challenge our industry to innovate and become as deadly efficient as possible. Providing patients with the right medication [and] the right counseling to go along with it will always remain the core of our industry, but through innovation we also need to make the practice of pharmacy bigger than it has been in the past by expanding the services and products we provide. Deadly efficiency in the practice of pharmacy will be required to thrive in the future.

The event kicked off Thursday evening with a series of one-on-ones that brought together Anda’s key customers and business partners. “The Anda Supply Chain Symposium is really designed to highlight Anda’s capabilities, bring together customers and manufacturers,” said Bill Versosky at Anda. “We shipped to an incredible amount of locations last year, and we just want to thank all of our manufacturers and customers for coming out.”

“The symposium is a great format to exchange business ideas [and] facilitate commerce, both on and off the golf course” added Marc Falkin, Anda VP purchasing.

The symposium this year featured guest speaker Larri Short, a partner in the Health Law Group at Arent Fox, who addressed pharmacy reimbursement issues now that First DataBank has stopped publishing average wholesale prices. Also speaking at the symposium was Ralph Neas, president and CEO of the Generic Pharmaceutical Association.

NFL Hall of Fame Quarterback Dan Marino and PGA Tour golfer Jeff Overton joined attendees on the Champion and Palmer Courses for 18 holes of golf on Friday.

TRENDING STORIES

Jean Coutu Group reduces stake in Rite Aid

LONGUEUIL, Quebec — The Jean Coutu Group has sold 56 million of its approximately 234.4 million shares in Rite Aid, the company said Friday.

The Canadian retailing group said the $83.6 million, $1.51-per-share sale, which amounts to a nearly 24% reduction in the number of Rite Aid shares the company owns, would reduce its stake in Camp Hill, Pa.-based Rite Aid to 19.85%. The Jean Coutu group still owns about 178.4 million shares in the 4,667-store chain.

As a result of the sale, the number of Jean Coutu Group representatives on Rite Aid’s board of directors will be reduced from three to two.

Rite Aid’s relationship with Jean Coutu Group began in 2006, when the former purchased 1,858 Eckerd and Brooks drug stores in the United States in a $1.45 billion cash deal that included giving Jean Coutu Group a 32% stake in Rite Aid. The deal also left Rite Aid with a large debt load, including the $850 million in Jean Coutu Group debt that it agreed to take on, but significantly expanded its market share.

Forgotten Password

Registration complete

REGISTER

USERNAME *

Spaces are allowed; punctuation is not allowed except for periods, hyphens, and underscores.

E-MAIL ADDRESS *

A valid e-mail address. All e-mails from the system will be sent to this address. The e-mail address is not made public and will only be used if you wish to receive a new password or wish to receive certain news or notifications by e-mail.

Password *

Confirm Password *

Please choose a password for your account; it must be 8 - 30 characters. .

First Name *

Last Name *

Company Name *

Job Title *

ZIP *

Are you a *

Retailer or Healthcare professional

Non-Retailer

How many stores do you operate?: *

Which best describes the business/industry you work in?: *

Which best describes your job title?: *

Please select the newsletters you would like to subscribe to

DSN A.M.
Daily news stories covering the retail drug industry

Breaking News
First-to-the-market with developing stories in the industry